Property

Resilient Property Values in Australia

Australia is hot again, and we’re not talking about a change of seasons. But an interest rate nip here and currency dip there and Oz has roared into a more prominent position on the investment radar of Hongkongers. 2013 should end on a high note for Australia, as a series of trends and measures could heat up its market.

Even Keel Itemising Australia’s selling points is every bit as predictable as listing what keeps London on the top of the global investment heap. It has a comfortable, welcoming climate, incredible natural beauty, admirable social policies — both legislative and individual — trailblazing environmental standards, excellent schools and a fundamentally sound, transparent financial infrastructure.

It’s not all perfect, however. New Liberal Prime Mister Tony Abbott isn’t terribly liberal (and he’s already put plans in motion to repeal the country’s carbon tax) and has been labelled a homophobe, a xenophobe and a misogynist among other unseemly determinations by critics. Women didn’t fare well in Abbott’s new cabinet (down from the last Labour government’s 6 ministers to 1), to which former Acting Labour Party leader Chris Bowen commented in The Guardian, “The cabinet of Afghanistan now has more women in it than the cabinet of Australia.”.

But Australia is nothing like, say, unstable Italy or repressive Myanmar. An unpopular PM can be legally ousted, and Elizabeth Chu, senior investment manager at Hong Kong’s IP Global, is of the mind the new government won’t have any impact on investment. “Abbott’s new government has pledged to boost the economy and encouraging foreign investment is one of the ways to do so,” says Chu. “He stated that he will make some necessary cuts in government spending and redirect money to invest into infrastructure especially in the three biggest cities Sydney, Melbourne and Brisbane. We believe that the property sector will definitely benefit from overall economic growth and infrastructure improvement.”

Holy Trinity According to research by IP Global, Sydney stands to gain the most. In the wake of the central bank interest rate cut to a record low, continued immigration into the city, a dollar that’s fallen 11 percent since the beginning of 2013 and its position as Australia’s business centre make Sydney an ideal investment destination. The market is stable, averaging just over 3 percent growth, and rental demand keeps the vacancy rate low (around 2 percent) for strong yields.

Australia’s fastest-growing city remains Brisbane, which has rebounded fantastically, at least physically and aesthetically after disastrous floods a few years back. The property market is waking up after a period of stagnation dating back to 2012. “Though Brisbane house prices have been flat over the last five years, rents have risen 5.1 percent annually since 2010, while the city’s vacancy rate of 2.1 percent for Q1 was the second lowest among eight capital cities surveyed,” notes IP Global’s most recent Property Barometer.